Contribution of financial institution is not just for more development, but also grow the economy of Nigeria. This is because the commercial bank attitude to the public is quiet

However, this study is aimed at identifying the contribution of financial institution in Nigerian economy, also to decimate its problem and prospects in Nigeria economy.

 This study also focused attention to extent the commercials banks has adopted the use of capital asset and knowing the effect and efficiently.

Moreover, it focus is also direct to general operation of financial institution in Nigeria particularly, commercial banks.

The research on the financial institutions in agricultural development in Nigeria” A case study of GTB Plc was necessitated by the fact that the agriculture development has been on issue of great concern in Nigeria. The financial institutions particularly GTB Plc has played to the development of this sector are critically examined in the study. The study is also aware of the pass role of agriculture in the development process when cocoa and rubber products were our major source of revenue. The purpose of the study includes ways in which the Nigeria agriculture and financial institutions particularly GTB Plc have been trying to revamp the agricultural sectors, highlighting some of the problems which prevent the full realization of objectives of GTB Plc and finding solution to some of its problems. The research also includes the procedure methods used in collecting data and other important information. The primary data method is the first method used to collect data. All the information gathered in this method were mainly through personal interview. The other method termed participant observation affords the one opportunity to watch the social settings and attitudes of the people under references. Finally, the work has tried to examine the problems militating against small scale farmers and the full realization of GTB Plc objectives is agricultural development. Some policy recommendations that will help improve agricultural sector were made, these include the best policy formulation aimed at revitalizing the agricultural loans, increased rural banking (new branches and mobile banking scheme) favourable agricultural produce marketing policies, adequate infrastructural development and agriculture research and extension services.  Also for policies to succeed, state government and their agencies are required to pay their loan in time so as to make the bank program work.



TITLE PAGE                                                                                                             i

CERTIFICATION                                                                                                     ii

DEDICATION                                                                                                           iii

ACKNOWLEDGEMENT                                                                                        iv

ABSTRACT                                                                                                               v



1.0       INTRODUCTION                                                                                         1

1.1       BACKGROUND OF THE STUDY                                                             1

1.2       STATEMENT OF THE PROBLEM                                                            2

1.3       SIGNIFICANCE OF THE STUDY                                                  2

1.4       OBJECTIVE OF THE STUDY                                                                3

1.5       SCOPE OF THE STUDY                                                                             3

1.6       RESEARCH QUESTIONS                                                                   3

1.7       HYPOTHESIS OF THE STUDY                                                                 4

1.8       LIMITATION OF THE STUDY                                                                  4

1.9       OPERATIONAL DEFINITION OF TERMS                                              4

1.10    CASE STUDY OF HISTORICAL BACKGROUND                                 5


2.0       LITERATURE REVIEW                                                                              8

2.1       THEORETICAL LITERATURE                                                                  8                      2.2            HISTORICAL BACKGROUND                                                                  10

2.3       THE ROLE OF COMMERCIAL BANK                                                    11

2.4       COMMERCIAL BANKING IN NIGERIA                                     13

2.5       EMPIRICAL LITERATURE                                                                        15


3.0       RESEARCH METHODOLOGY                                                                 20

3.1       INTRODUCTION                                                                                         20

3.2       RESEARCH DESIGN                                                                                   20



3.3       RESTATEMENT OF RESEARCH QUESTION                            20

3.4       POPULATION OF THE STUDY                                                                20

3.5       SAMPLING DESIGN AND SAMPLE SIZE                                              21

3.6       DATA COLLECTION INSTRUMENTS                                                    22

3.7       VALIDITY OF THE RESEACH INSTRUMENT                         22

3.8       RELIABILITY OF THE RESEARCH INSTRUMENT                              23

3,8       METHOD OF DATA ANALYSIS                                                  23

3.0       LIMITATIONS OF THE METHOLODY                                      23

CHAPTER FOUR                          

4.0       DATA ANALYSIS AND PRESENTATION OF RESULT                       24

4.1       INTRODUCTION                                                                                         35

4.2       PRESENTATION OF DATA                                                                       36

4.3       ANALYSIS OF RESPONSE                                                                        33



5.0       SUMMARY, CONCLUSION AND RECOMMENDATION                   34

5.1       SUMMARY                                                                                                   34

5.2       RECOMMENDATION                                                                                34

5.3       CONCLUSION                                                                                             36

REFERENCES                                                                                              37                    QUESTIONNAIRE                                                                                       38






The idea of establishing financing institutions was mooted soon after the establishment of the central bank of Nigeria on first july1959, after the bank failures of the early 1950’s. At this stage, it became obvious that there was an urgent need to establish financial institutions capable of providing medium and long-term capital to full up the serious gaps in the financing system of the economy.

In view of the dwindling position of the economy the government has at various times tried to correct through monetary and fiscal policies the downward movement s of the economy as well as to place the economy on a path of meaningful development.

Owing to the important roles agriculture and manufacturing sectors are expected to play in the economic development the government introduced to a lot of policies to encourage production in these sector for example. The stipulated sect oral distribution of loans to agriculture and manufacturing sector (preferred sectors) has been increasing over the years. The government executes the monetary policies through the years. The government executes the monetary policies through the banks of which commercial banks are the key players.

Generally, we know that the financial system of any society (of which the banking system is undoubtedly the most dominate), is the framework within which capital formation takes place through intermediation of the institutions. The participants in the banking system mobilize resources from the surplus units and channel some of the deficit economic units of any country for industrialization. The banking and financial system is also required to stimulate investment, and channel such to the priority areas of the economy, thus, it acts as a transmitter of a government economic policies for growth and development through its social responsibilities. This industry is a force to reckon with in the area of employment. Banks set apart handsome portion of their annual profits to finance worthy ventures that have spillover effects on the development efforts of the government of their local communities.

With the support and encouragement of the international bank for reconstruction and development (World Bank) the first indigenous development financial institution was established in January, 1964 in the name of national import database (NIDB). The establishment of this bank in January 1964 was foreshadowed by the incorporation in 1959 of a private investment company of Nigeria (ICON) as an industrial financial with the aim of providing long and medium term finance for industry.



This research entitled “the role of financial institution in the development of an economy” attempted to determine the role of financial institutions in enhancing the economic development Nigeria, with particular reference to some premier financial the northeast Asia cooperation bank. These two financial institutions because their role in envisage to be a representative of role played by other financial institution in economic development for Nigeria.



The study of the role of banking and financial institutions in Nigeria is indispensable and equally significant because this role will not only enhance the economic growth of the Nigeria nation but will also improve the standard of living of the people as it directly and indirectly creates job opportunities for the teaming populating of the army of unemployed in the country. The role of financial institutions is equally worth studying because of its unique position as being solely responsible in determine and launching the nation into a vibrant economy.

The study is equally significant to the generality of Nigerians since this research reviewed the role of the financial institutions in meeting their primary objective as well as other objective with a view to improving the economic position of Nigeria. This study also review the primary role of this institution which include among other numerous function ‘proving equity capital and funds by way of loans of indigenous person, institution and organization for medium and long term investments in industry and commerce at such rates and upon such terms as many determined by way the broad in accordance with the policy directed by the federal executives council”

This study is equally significant in that it has reviewed the activities of Nigeria.

This research will hopefully be of importance to any developing nation hoping to establish financial institutions to help speed her economic development since it has highlighted the role and functions such institutions play in economic development.



The main objectives here are to examine the functions of the financial institutions and access their impact on the economic growth and development of Nigeria. To be able to appreciate properly these developments, however, we need to examine the ownership distribution of the institution in the system, the structure of the system and the legal and regulatory framework within which the institutions operates.

This study also tried to ascertain how much of the objectives the financial institutions and banks have been able to achieve their standing relationship with the Nigerian public and the central bank of Nigeria (CBN).

The research will therefore look into the future of the financial system its responsibilities and its role in the Nigerian economy of tomorrow and therefore suggest likely ways of solving the problem.



The research is centered on the periods between 1990 and 1993. This range has been adopted because of availability of data.

This researcher entitles “the role of financial institutions in the developing of economy”. Is very vast but for purpose of financial constraints, availability of material and time.

It has therefore restricted or limited itself to some premier financial institutions like the northeast Asia cooperation bank (NACB) and banks. These two financial institutions were chosen as representatives of the development financial institutions because their role is envisage to be representative of role played by other financial institutions in economic development of Nigeria.



  1. Does your institution play any role in the economic development of Nigeria?
  2. If yes what are the roles
  3. Have your institutions some area(s) of priority?
  4. If yes is increased rural banking among your priority?
  5. What are the roles of the insurance sector in the economy?
  6. Do you think that the overall objectives of establishing the institutions tends towards meeting the political and economic needs of the country?



The following hypothesis will further help guide the work and have been stated in their null form

Ho:      Credit delivery by financial institution has no impact on the growth of the economy.

Hi:       Credit delivery by financial institution has an impact on the growth of the economy.

Ho:      Financial institute as a development tool does not supply all necessary information needed for decision making.

Hi:       Financial institute as a development tool supply all necessary information needed for decision making.


The study however, faced certain factors which serve as limitations these include:

  1. Lack of adequate material due to reluctance by banks to release their financial records
  2. Financial constraint to cover the whole banks in Nigeria.



Deregulation:- this is the policy of removing every form of control measures in the financial system of the economy.

Financial system:- this comprises the financial institutions. Intermediaries instruments, regulations and rules interacting together. In ensuring capital are moved from surplus to deficit unit.

Interest rate: this is the incentive given to despots on savings account with banks.

Monetary control: this is the instrument at t6he disposal of the monetary authority to influences of availability and cost of creditor money with the ultimate objective of achieving price stability.

Monetary policy: the regulation of the money supply interest rate by the rate central bank order to control inflation and stabilize currency. Monetary policy is one of the two ways the government can impact the economy.



Guaranty trust bank plc was incorporated as a limited liability company licensed to provide commercial and other banking services to the Nigerian public in 1990 and commenced operations in February 1991.

In September 1996, guaranty trust bank plc became a publicly quoted company and won the Nigerian stock exchange president’s merit award. In February 2002, the bank was granted a universal banking license and late appointed a settlement bank by the central bank of Nigeria (CBN) in 2003. (i) Guaranty trust bank undertook its second share offering in 2004 and rose over #11 billion from Nigerian investors to expand its operations. On 26th of July 2007 GTB bank became the very first sub-Saharan bank and first Nigerian joint stock company to be listed on London stock exchange and deutsche brose. The appraised us $150,000,000 (2).

In the same year. They successfully placed Nigeria’s first private Eurobond issue on the international capital market (3). They introduced online banking and sms banking in Nigeria and a naira denominated MasterCard as well as the platinum and world sign in cards and with GTB- on- wheels, mobile branches.

On 12th of March 2008, GTB bank was given a banking license for the united kingdom by the financial service authority (7).

GTB is a partner of Eko Atlantic city a new made island (820 ha). In the Atlantic ocean, adjacent to Victoria Island Lagos. It will be the home of the new financial district. The building of eko Atlantic City started in 2009 and is expected to be finished in 2016(8). To commemorate the bank’s 20th anniversary, the Nigerian postal service issued a set of GTBank Anniversary postage stamps. This was the first time in Nigerian that a cooperate organization was honored in such a way (9).

In 2011, the bank became the biggest bank in Nigeria by market capitalization.

In 2013, the bank issued a U S D 400,000,000. Eurobond at a cooperate of 6%, the least obtained by Nigeria company in the international capital market. The Eurobond was issued under the U S D 2,000,000 global medium term note programmed, which is registered under both regulations in the united state of American and rule 144A in the

United Kingdom and sold to investors across African, Asia and Europe (ii).

The bank has over 10,000 employees. (12).


*Mrs osaretin demuren is chairman

Segun agbaje ia managing director.

Cathy echeozo is deputy managing director.

The other member of the board of director includes.

Akindele, akintoye, Adebayo, adesola, andrew, alli, olabode, augusto, Ibrahim, Hassan, hezehiah, oyinlola, imoni, akpofure, olutola, omolola, demola, odeyemi, haruna, musa, and wale,oyedeji, (13).
















GT bank plc has 2224 branches, 17 cash centers,18 e-branch 35 GT express locations more than 1165 ATMS in Nigeria.

GT BANK has expanded to cotedivoire, ganbia, Ghana, Liberia, Sierra Leone, Uganda, Kenya and Rwanda. These countries belong to the “ECO ZONE “it has also expanded to the united kingdom. With the acquisition of a 70 percent stake in financial bank, GT bank expanded into the East African market as at December 2013. As a conquence, financial bank, will now be renamed and rebranded as subsidiriaries of GT bank (14) .